Main Street' Goes to Washington
Consumers for Competitive Choice to voice opposition to credit-card interchange fees
INDIANAPOLIS -- A coalition of small-business owners will march on Washington this week to make a plea for credit-card-fee reform. Big and small businesses alike were hopeful when the proposed Credit Card Accountability, Responsibility and Disclosure Act was signed and set to take effect mid-February. The ruling was designed to reign in the worst practices of the credit-card industry. All but one: interchange fees.
The burden of these fees are felt by all businesses, but perhaps none more acutely than the small onessome of whom watch 2-5% of their profits disappear to settle [image-nocss] their debts with major credit-card companies. Retailers must pay to play, and unfortunately, said Jim Conran of the Indianapolis-based Consumers for Competitive Choice, they can't really survive in business without playing along with the credit-card companies.
"We are not opposed to having fees to recognize the expense associated with credit-card purchases. We just want to make sure those fees are fair," Conran, the executive director of the group, said in a press conference this past Friday. "Last year, Congress addressed many issues impacting the consumer market. They did very little to address issues of the small business market. And I think that everyone agrees that until the small businesses get back on their feet and begin to grow,... the economy is not going to improve. Clearly these transaction fees are really harming the ability of small businesses to grow."
Indeed, where U.S. businesses alone accounted for $48 billion in interchange fees last year, it's easy to understand how these smaller retailers deem the interchange fees unfair. That's why dozens of businesses, along with Consumers for Competitive Choice, are planning a visit to Washington to urge their senators and representatives to support interchange-fee reform, a cause that has been taken up by convenience store heavyweights 7-Eleven and Circle K, as well as 10,000 other stores taking part in the petition program sponsored by NACS.
Making the trip this Thursday is Jennifer Cavallaro, a small-business owner in Bristol, R.I. She, along with the trip's sponsors, would like to see lawmakers approach the issue in three parts:
Bring transaction fees down to the level of paper checks. Force credit-card companies to embrace transparency by spelling out how the fees are assessed and processed. Encourage federal regulator oversight through the Federal Reserve or a President Obama-sponsored measure. "We think these are reasonable requests," Conran said.
Cavallaro, a fairly new business owner, said her coffee shop is growing but it is not yet profitable. She deems the fee practice as "extremely unfair" and said it's "hurting my small business." She, along with her small-business cohorts, finds the arbitrary nature of the fees unavoidable, not to mention nonsensical. She couldn't remain competitive if she disallowed the usage of these cards in her store, but she's struggling to keep them.
"It's like if somebody came into your shop with a gun and held it to your head and said, 'You're going to buy this printer for $300, and then you're going to put a dedicated phone line in for another $60 a month. And then, I'm going to be the one that decides how much each of your transactions are going to cost. I'm going to take money out of your consumers' accounts when they pay for an item, but I'm not going to give it to you for two days,' " she said during the conference. "You would call the police. It's just amazing. It's the anonymity of these companies. They're doing these things and forcing us to be subject to both the fees and the system as a whole. And we have no choice."
Consumers for Competitive Choice Inc. (C4CC) is a diverse national coalition of Americans who support a strong, vibrant and consumer-focused economy. It is comprised of small business owners; blue- and white-collar workers; retirees and young people beginning their careers.